Shell – hunting for oil and gas off the coast of Alaska – is attemping to push into the sector’s last great unexplored frontier. The Arctic contains almost a quarter of the world’s undiscovered oil and gas – the eqivalent of around 400 billion barrels of oil, according to the US Geological Survey.

Shell had been ready to begin drilling for oil in the inhospitable Chukchi Sea, but has been forced to delay its plans after the failure of its so-called Arctic Containment System to clear up spills.

The system — a giant dome attached to a container barge – is designed to catch the oil gushing out of a blowout and funnel it to the barge to prevent an environmental catastrophe. But the dome developed a fault which will take several days to repair, the firm said.

Shell’s caution comes with the industry under intense scrutiny for its safety and environmental record following rival BP’s Deepwater Horizon disaster in 2010. “In order to lay a strong foundation for operations in 2013, we will forgo drilling into hydrocarbon zones this year. We will not conduct any operation until we are satisfied that we are fully prepared to do it safely,” the company said.

The delay effectively shuts off Shell’s attempts to explore in the Chukchi Sea until next July because the drilling season ends next week. The firm also needs permits to drill from the US Coast Guard, which will not be granted until the containment system is successfully tested.

Shell will continue to work off the coast of Alaska but will only drill the top part of wells — so-called top holes extending 1300ft down – before temporarily closing the holes and returning to them next year, creating a “strong foundation for operations in 2013”.

The firm could still drill in the nearby Beaufort Sea, where the drilling season lasts until October, when the eskimo whale-hunting season is over and when the firm gains the necessary permits. Sources close to Shell said the delays were not significant because its offshore Alaska exploration is not due to produce commercial oil until 2017.

Charles Stanley analyst Tony Shepard said: “Shell only had a short window this year to do something, although this looks like cutting this out completely. But Shell are pioneers here, it’s a long-term project and they’re hoping to find some big barrels.”